Samsung will bounce back from its Galaxy Note 7 PR disaster

Samsung can soak up the costs but brand damage is the big unknown (Source: Getty)

Arjun Kharpal

Samsung's Galaxy Note 7 fiasco has been top of the headlines for the past six weeks, with the world’s largest smartphone maker finally deciding to stop making the highly combustible phablet.

The result was an expected $5bn-plus hit to the company’s profit from the third quarter of this year to the first quarter of 2017.

But throughout the saga, the electronics giant gave very little clarity about what was actually going on.

CNBC among other news organisations reached out to the company as to what the precise issue is. Samsung usually issued vague statements about how safety was a priority and the way it was working hard to resolve the problem, but never were there any details on what was exactly wrong with the Note 7.

And amid all the confusion, Samsung released statements about how well the replacement and exchange process was going… before the replacement devices also began to catch fire.

I can’t help but feel a little more clarity along the way could have helped quell some of the backlash and bad press. The poor messaging caused speculation and further misunderstanding, and in some cases underplayed the severity of the situation given the reports of many people not actually returning the devices.

The question now revolves around how much this is going to damage the company’s reputation for future product launches. Analysts agree that Samsung can soak up the costs, given its strong financial position, but the unknown factor is brand damage.

One big elephant in the room will be what the Note 7 debacle has done to Samsung’s relationship with the mobile carriers on which it relies to sell its phones. If we see a major carrier not bothering to sell Samsung’s upcoming Galaxy Note 8 because it distrusts the quality, other mobile companies could easily follow.

Samsung typically releases its flagship Galaxy S series smartphone in the first quarter and this is still about five to six months away. In this time, Samsung will not take this episode lying down and the South Korean titan is no doubt going to throw everything it has at marketing its way out of the situation.

At the end of the day, Samsung is still known for making quality devices. Its current flagship Galaxy S7 device is still selling well and the Note 7 was an innovative handset that gained praise from the tech press, before the battery issues.

But it appears that the Galaxy S8 will really need to blow the socks off (not literally) consumers to make them forget about the Note 7 saga and allow Samsung to return some of the lost momentum to its smartphone business.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.